FSA Education

Sometimes referred to as a Cafeteria Plan, Flex Plan, or a Section 125 plan — a Flexible Benefits Plan lets employees set aside a certain amount of each paycheck into an account — before paying income taxes. During the year, employees are reimbursed from this pre-tax account for healthcare and/or dependent daycare expenses.

When employees use tax-free dollars to pay for these expenses, they realize a substantial savings and an increase in spending power.

The company saves too – 7.65% (FICA match) on every dollar employees contribute to the plan.

Some employers offer both a Limited Flexible Spending Account (LFSA) and a Health Savings Account (HSA). If you are enrolled in an HSA, you might also be able to enroll in an LFSA. An LFSA is similar to a regular FSA in that it lets you set aside money on a pre-tax basis for healthcare expenses. However, it is limited to dental and vision expenses so it complies with HSA guidelines.